Smaller companies spotlight

EACH week, former Fleet Street City Editor Patrick Lay keeps This Is Money readers up-to-date with a neglected, but exciting sector of the stock market - smaller companies.

Computer dating MARK Brown has earned a very good living for the past 11 years by introducing IT experts to companies needing their services on short to medium-term contracts.

Now he is providing the means for the two sides to get together themselves, while his company collects a 10% commission - still roughly half what most introducers charge. Brown's business, Applicado, is planning an Ofex quote in July.

Applicado is an online recruitment agency that provides freelance technical consultants, specialised in installing, maintaining and training in integrated computer systems such as those provided by Oracle. The idea is simple. A company installs a complicated system and it needs a techy to ensure that everything runs smoothly. Sometimes they need a body for a few days, sometimes for a few years. All the time Applicado picks up 10% of the agreed fee.

For the past five years Brown has handled the introductions in the more conventional fashion through his NTR agency, which has a turnover of £9m a year. A client makes a request, he and his team phone people on the books to see who is available and arrange an introduction.

Developed over the past 18 months, Applicado's software allows clients to register their needs and specify a job. It then e-mails a selection of contractors who might be interested. It cuts out 90% of the phone calls and reduces the number of advisers to one per hundred contractors, compared with the traditional agency model of employing at least a dozen.

The contractors enter their price for the job, which can be altered if the competition is cheaper. A short list of the responses together with relevant cvs is sent to the client, which selects those it wants to interview.

'The price paid is market-driven,' says Brown, who already includes Nato among clients for NTR and Applicado, and several large commercial companies. 'There are probably no more than 2,000 experienced Oracle consultants outside of the US, and at least a quarter of those have worked on contracts supplied through either NTR or Applicado.' Other major systems that contractors are employed on include SAP, Siebel, PeopleSoft and Cadence.

Integrated systems is one of the fastest growing areas of IT spend, estimated to grow to $100bn (£70bn) worldwide by 2005. That means demand for consultants will increase. Applicado wants the Ofex money to build offices on the Continent to service its growing international client base.

Harbinger of Abinger For the many followers in this column of financial services firm Abinger Investments, I bring a note of hope from web tipster, Mark Watson-Mitchell, who is predicting for pre-tax profits of around £400,000 this year and a staggering £1m in 2003. The annual meeting is on 25 June when the name will be changed to CFA Capital Group. A note for your diary.

Some you may have missedARMOUR Trust, the electrical equipment firm in the Bob Morton stable, has moved to a £100,000 operating profit in the six months ended February, from a £15,000 loss in the year-earlier period. The results are particularly encouraging 'given the wider economic uncertainties that have persisted over the past six months,' says Morton.

He expects the full-year results to show continued growth, provided consumers keep spending. Armour is moving from a full listing to the Alternative Investment Market 'where the transaction costs for acquisitions are significantly lower than on the full market'.

AUXINET chairman David Bailey was upbeat at the yearly meeting, confirming the board expects the e-commerce payment solutions provider to make a profit in 2002.

COMPACT Power Holdings expects to announce shortly an order for its plant, which produces energy from waste.

COUNTRYSIDE Properties has pre-let its 47,461 square foot Aymer House office development in Chertsey, Surrey, to caterer Compass on a 20-year lease. The company claims it is one of the most significant pre-lettings this year in the office market around the M25, the highway that circles London.

FOUNTAINS, the environmental support services group, lifted pre-tax profits by 8% to £477,000 in the six months ended March. That was despite foot-and-mouth cutting sales by an estimated £2m. The order book is stronger than this time a year ago and the bidding pipeline for new work continues to improve.

GOLDSHORE Holdings, which operates employee benefit programmes through 'Staff Shop', has raised its minimum subscription of £400,000. It has also extended the offer period until 12 June. The shares will trade on ShareMark.

GROSVENOR Land Holdings has bought 5.72% of AIM-listed Property Internet, and agreed to buy a further 23.54% for a total of £535,000.

AIM-listed diamond and gold explorer Mano River Resources has discovered micro diamonds and abundant kimberlite indicator minerals in samples from its exploration in Kono District in Sierra Leone. 'Exciting and encouraging' is how chief executive Tom Elder describes the find.

AN operating loss before goodwill and one-off items and no final dividend for the year ended March are in prospect for shareholders of Savoy Asset Management, the investment manager chaired by former Chancellor Ken Clarke. The board is to ask shareholders to approve a capital reorganisation 'which will enhance the group's ability to pay dividends'.

UNDETERRED by its struggle to turn its investments into profits - it wrote off £326,100 last year - investment company Viatrade has bought a 1% stake in Centacom Inc. The US firm provides simultaneous voice, data and video over internet applications. The price is a very precise £49,494.40p. If it raises a further £25,000 to £50,000 for Centacom - either its own cash or an outside investor - Viatrade will be entitled to appoint a non-executive director to the board.

WATERMARK Group, which provides services to the travel industry, has bought Globe Audio, a headset provider to the airline and leisure industries. The price is £604,145 of which £200,000 is payable in cash on completion and the balance based on performance through the allotment of shares in 2003 and 2004.

Some to look out for ANNE McMahon, analyst at broker Seymour Pierce, is impressed by the 24% rise in mortgage advances at Bristol & West Investments to £12.9m for the year ended March. That's the highest level yet for the company. McMahon says the shares are a 'buy.'

RETAILERS New Look and Merchant Retail are 'buys', says Richard Ratner, analyst at Seymour Pierce. 'Some commentators might have suggested that we have seen the best in New Look - we haven't,' he adds. Shares in Merchant Retail 'still have further to go, albeit maybe not in the short term'.

PETER Ashworth of Teather & Greenwood is 'bullish' about Genus, the cattle breeder that boasts Machoman, a Holstein Friesian bull voted number one in the world by the US Department of Agriculture, among its assets. He has upgraded the shares to 'strong buy' with a price target of 250p, from the current 158p.